welcome to today's "worldwide exchange." i'm kelly evans and these are your headlines from around the world. george osborne is set to make plans to break up banks. we'll bring you live coverage of that highly anticipated speech.

a corruption scandal weigh owes mario rajoy's party as he prepares to step down. we should assume that might win this discussion. it will completely break down. >> and the other side of the story from bumi's co-founder. >> and it's extraordinary comment for the chairman of a british company to make. that seems to be the main thrust of his argument to win this. and it's wrong. >> announcer: you're watching "worldwide exchange," bringing you business news from around

the globe. >> an extraordinary back and forth there on this monday morning. welcome to today's "worldwide exchange." ross westgate is away but we'll do our best without him. we have michael brown to help us through things. coming up on the program, we'll head out to hong kong where china is requiring a reinstruct during of the economy. after that, of course, the super bowl wasn't just one of the on biggest sporting events of the year, it was one of the biggest days of the year for madison avenue. we'll take a look at which ads were touchdowns and were ads were fumbles. >> mariana rajoy meets angela merkel. plus, upcoming elections that sylvia berlusconi has called his last great electoral and political battle. the power to split up uk banks if they fail to -- activity. george osborne is expected to

give the bank of england the responsibility to make sure banks are involved in these activities. you have to love the extended analogy. watch the george osborne speech live here at 10:30 local for those of you here with us in the uk. in the meantime, there are more charges at the top over at barclay's. last night, the bank's financial chief and financial chief announced their leaving. tomorrow, barclay's ceo anthony jenkins will face questions in parliament over banking standards and next week he will present his long awaited plans for transforming the bank. and a number of stories about rbs also in the weekend press. the sunday times reporting the bank will announce a 500 pound settlement with u.s. and uk

regulators later this week. rbs will cover the bonus pools after a warning from the government that taxpayers should not foot the bill. rbs is planning to float the 316 branches of santander it has so far failed to sell. according to the papers, an ipo would allow the bank to dispose of that unit cleanly. lots going on. we're pleased to be joined by michael brown. welcome. >> happy monday morning. >> i know you want to talk about the super bowl. >> well, that would be nice given i was up watching it. >> i'm impressed. i should have been up staying up all night. my sister lives in baltimore. >> there are plenty of bank stories to get to in the meantime. >> absolutely. >> we're going to hear from george osborne in just a couple on hours' time. what does this mean? >> the idea is, of course, that

we should have capital in both parts. but the problem is, there isn't enough capital to go around and, therefore, you don't want to spook the financial markets by saying, by the way, yes, you do need to have this. how do we get to where we want to be, i.e. enough to be able to be separate businesses, without actually undermining the whole market pre-september about the banking stocks. it's incredibly narrow bridge to be walking over. what osbourn is trying to do is satisfy the political aim but actually not completely over the banks at the same time. will he achieve it? the devil will be in the detail and it won't be in today's speech. it will be in the bill that we get to see. my sense is that the time horizon will be so great -- >> so much regulation. >> well, no, that's accelerated, hasn't it? last month, we've seen a number of pieces of regulation pushed out further and further and

further. you could argue that bank management should not take it on board. they said, no, we're going to do this now because once that's done, i can go back to running my own business the way i want to. i still think that pressure is on individual managers. but the regulators and particularly last week backing off. >> this comes at a time when there are certain types of proposals in the u.s. this is not just a uk issue. it seems around the world, there is no appetite. but practically speaking, what will be the impact of this? >> i think of two elements. retailers have pretty much moved to very high margines and this product. those products are not necessarily totally restricted, but it's nothing like what is available in the early part of the season. you've got high margins, retail banking creating a lot of cash flow, but it's a very, very low

growth business. you can't grow the business so far, your return will be 7%, 8%, 9% yield as an investor. the trick side is, how do you get from where you are to where you should be or where you're being told to be? i think in rbs's case, there's a better chance of getting there quicker. >> we'll leave it there. spanish prime minister march anna rajoy is meeting with angela merkel today in berlin. this ahead of parliament talks. this comes amid a corruption scandal at home that has called widespread calls for his resignation. he came out on saturday and vehemently denied receiving any payments. have you been following this story? >> how can i not? >> what does it mean for the political instability now?

>> the question is, what's the truth? we'll see rajoy's tax documents come out later this week. there is clearly a problem here. we have one senior member of the party and the significant investigation. if rajoy is removed, what is the alternative? would we go into a general election and would that alter the economic positions that spain finds itself in? some will argue it would because they don't -- take it on board, introduce the external controls and if you like wrap up the situation. so there's a bull argument within the bear argument. >> where do you fall on that spectrum? >> i think it's going to be business as usual from a political point of view. >> and do you like your investments here? >> yes, i do. >> at what point do you start to take profit? >> i think the credit markets are telling you that. i think it's beginning to say a run for the spanish bull market which could go further, but it's not the same in the last three

or four months. >> there's a ten year, 5.31%. are you sticking with it until it goes below five? >> technically, if you hold rates where they are and germany around 2% at 4%, 4.5%, but that's not the move from 7 that we've seen in the last month. >> missed the easy money. stay tuned. in just under half an hour, we'll be live with that meeting on merkel and rajoy. silvia wadhwa will join us for that. first, let's get the latest from asia. sixuan joins us for that. what are markets doing today? >> it's a mixed day of asian bourses. the nikkei ended at a 33-month high. finally the yen split is still a priority. even as dollar/yen trades near the 93 level. panasonic shares jumped at 17% after turning to a quarterly

profit in q3. the shanghai composite ended higher by 0.4%. official services pmi data confirmed a mild recovery. coal miners soared on higher demand and a new policy to improve mining efficiency. liquormakers took another beating after the public sector was urged to stop posing boozy banquets in the upcoming lunar new year. ping an insurance slipped nearly 3% today despite hsbc repeating the okay from beijing to sell its remaining stake. investors are afraid that hsbc might have sold its -- given how much market has value since the deal was first announced on december 5th. elsewhere, technologymakers brought the south korea kosty poundy by about 0.25%.

meanwhile, australian shares ended lower ahead of the rba meeting down by housing data and job advertisement. india's sensex now trading lower by about 0.1%. back to you, kelly. >> sixuan, thank you so much for that. we'll see more for you in just a bit. bankia, they're leading the market up about 6% after we saw last week's bain allowing the short selling ban go away. not necessarily putting appreciate pressure on those shares today. we've been on extended runs for a lot of these indexes. cac 40 giving up some ground this morning. ibex 35 down about 0.3%. the ftse lower down, as well. the bottom space is where we've been focusing lately and even today, the ten-year in spain,

5.3%. we'll see what happens with the latest round of political instability. italy, though, 4.4% just about. so it is holding below the 4.5% levels. for ex, this is the one to focus on. look at this. 93, a 2 1/2 year high for the dollar against the yen. another 0. % this morning. but, again, that 93 level we've just been crossing so this is the highlight of trade this morning. talk about the impact that's having on the nikkei. quick look at commodities, over in the u.s., gas is trading at its highest price in february ever. the rally in stocks has lifted oil prices. there are some talking about nymex here which is concernedly just under $100 going to $105. that's going to put a lot of pressure on the u.s. consume perpendicular copper, giving

about 0.3% today. now we'll take a quick break. when we come back, china's biggest search engine reports earnings today in the fierce competition. we'll discuss the battle for search in china when we come back. [singing] hoveround takes me where i wanna go... where will it send me... one call to hoveround and you'll be singing too! pick up the phone and call hoveround, the premier power chair. hoveround makes it easier than any other power chair. hoveround is more maneuverable to get you through the tightest doors and hallways. more reliable. hoveround employees build your chair, deliver your chair, and will service your chair for as long as you own your chair. most importantly, 9 out of 10 people got their hoveround for little or no cost. call now for your free dvd and information kit. you don't really have to give up living, because you don't have your legs. hoveround replaced the legs. and now every hoveround comes with this handy tote

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welcome back to the program. bumi's cofounder is being called to return his shares. it comes as the battle to control bumi is set to play out during an extraordinary shareholder meeting on february 21st. in an interview earlier, bumi's chairman stepped up calls for shareholders to vote against the rothschild proposal. >> we should assume if nat rothschild comes to bumi, the separation will completely break down and as a result, buckley will compete on the shoulders in what i can tell was just months and months if not years and years of litigation among the

various parties. and this is just a destruction of blc. you have a very whiting party to try to separate. i believe if this board wins, the relationship with buckley will be such that we can manage the assets. >> now, rothschild, though, joined cnbc shortly after those comments to defend his position. >> it's an extraordinary comment for a chairman of a british public company to make. that seems to be his main -- the main thrust of his argument to win this egm. and it's wrong. because, first of all, there is a takeover panel ruling. that says that the counter party, of which he is a paid up member has to sell down to 29.9% of the economics of the business. that is the first point.

the second point is that the bacrie family, put bluntly, owe $550 million against the pl shares, therefore, they are not in a position to pursue a scorch surge strategy against minority shareholders. and the third point is, why should the backrie family be interested in what happens after they leave? if there is no side deal between samitan and the backrie family, why is the backrie family so interested in what happens after their exit from this company? >> extraordinary back and forth there. >> and on camera. unheard of. >> what do you think about this as an investor? >> look, these are some of the situations as an investor you can't get involved in. as an outsider looking in, it's so complex, it's so detailed. and how on earth can you really

get full information in situations like this? so not just a situation like this would i avoid, but situations where politicians are getting involved in companies and redefining companies because i can't predict what they will do. >> do you think they generally destroy value for shareholders, these kinds of situations? >> i think you have to look at each one individually. and i'm not an m&a man. i'm sure the m&a guys are all over it. this is exactly their meat and drink. >> they live for it. >> but i'm just a poor old fundamentalist. >> and there's a lot of shareholders caught in the middle of this. we want to ask you what you think about the back examine forth. do you jump in on one side or the other, steer clear altogether? you know how to reach us, cnbc.com or tweet us, @cnbcwex.

julius baer's profits came in better than expected, but shares are trading lower, down by about 2.4%. doesn't sound like investors or shareholders are all that thrilled with julius baer this morning, though. >> certainly not. julius baer is the biggest loser on the smi at this point. it could be a bit of profit taking because this share or this stock like all the other stocks have had a really good run in the month of january. but you mentioned that .7.billion swiss francs, that still translates into 577% annualized growth. kelly, this is still at the upper end of julius baer target, 4% to 6% growth. this is not too worried. the fact that growth margins were under pressure in 2020 12.

they came in at 96 basis points. when i talked to the ceo this morning, he said, look, activities has been picking up in terms of equityivety, but whether that growth margin can exceed 100 basis points, that remain toes be seen. timely, the ceo said that the integration of merrill lynch's wealth management business internationally, that was well on track and this year it will have a neutral to slightly negative impact on group results. keep in mind, ubs earnings are out tomorrow and credit suisse reports fourth quarter earnings on wednesday. >> sounds like it will be a busy week for you. in other news, merrill lynch says it's expecting a revenue range of 1.7 billion to $2 billion in revenue and that would leave sales flat at best in the second quarter. htc now says it will concentrate

more on emerging markets. now, china's largest search end baidu reports fourth quarter results today. analysts said expect a jump to around $1 billion. the nasdaq listed company is facing new competition from up-saturday kihu, i think that's right, to capture more eyeballs and ad revenue. baidu expects costs to rise as it spends on the cloud and data centers. shares up about 0.3% on friday. jin yu, thanks for joining us. let's start by talking about baidu earnings. what do you expect from the company? do you like, generally speaking, its prospects here? >>. >> i think heading into tomorrow's print, i think expectations are pretty low.

obviously, baidu has been doing well this year. however, given the fact that the fourth quarter numbers, the guidance is a bit of a kitchen sink number where we think in q1, the guidance should be better than expectations. we think that the first quarter guidance, when they report tomorrow, should be better than expectations. so we would be owners into the print tomorrow. >> can you talk about how this transition from a peace to a mobile world is affecting baidu? >> yeah. you know what? we think that mobile is an opportunity rather than a threat because if you look at kind of google, who is three or four, five years ahead of baidu in terms of mobile platform and mobile search, we noticed that google, for example, has seen click come down, but you're seeing more click because a lot of the mobile has been

instrumental. baidu frankly does not have a platform like android. but in the long run, we see mobile as an opportunity rather than a threat. >> so it's interesting you say baidu is three to five years ahead of google. google has done quite well. are there opportunities for investors to look overseas to tap into some of that continued growth? >> actually, i meant to say google is three to five years ahead of baidu in terms of mobile. but it's very, very hard for new entrants to make significant market share in markets where you have an incumbent with 50%, 60% of market share. and for badu to gain market share in other countries where google is dominant, it's going to be very difficult. new entrants has not gained a

significant market share. >> we've seen their shares up. i'm just looking here at a price chart over the last couple of years. they've outperformed google, outperformed the nasdaq. so what do you think baidu needs to say here to investors to convince them that there is potential? >> well, you know, i mean, baidu's biggest risk is not necessarily the transition to mobile. it's not necessarily competition from chihu because chihu doesn't generate a lot of revenues on the search side. market shares in terms of page view is less than 10%. the biggest risk for baidu is frankly baidu. how are you going to grow? the only way you grow is if the pie gets bigger. but the pie, obviously, because of the base effect is growing at a rate. baidu needs to invest in peripheral products, including mail, video, mobile and so forth. and i think baidu gets there,

but it may take some time for a lot of these investments to be fruitful. i think it will remain in the nearly term range bound trade. but certainly as these guys continue to press forward in terms of mobile, now they consolidat consolidated. we think there's more up side in the near term, in the future. >> perfect. we'll leave it there. jin yoon, appreciate your time. those baidu results will be out a little bit later. the dow jones industrial average, in the meantime, has a relatively smooth ride until the end of december. with the light week ahead and the first major week of the earnings season coming up, could there be trip wires for the bulls stock market? head over to our website. see what analysts are saying at cnbc.com. and as the stock market continues to post gains, apple shares continue to decline. hear what analysts have to say about that. plenty of stuff to keep you busy

over on the website. when we come back, following workers protests, riots and strikes, boscon is planning a chinese union vote for the very first time. is this a sign of genuine change? stay tuned.

welcome back to "worldwide exchange." we'll brick you live coverage of george osborne's speech. >> mariana rajoy faces opposition demands to step down as more spaniards take to the streets. in corporate news, bumi says rothschild should return shares from creating the company. bumi's chairman spoke with cnbc just a little while ago. >> in discussions about the separation between barclay's and bumi would completely breakdown. >> and we also heard the other side of the story from bumi's co-founder, nat rothschild. >> it's an extraordinary comment

for a chairman of a british public company to mag. that seems to be his main -- the main thrust of his argument to win this egm. and it's wrong. not a strong month for construction in the uk. the construction pmi for january remained at its lowest level since june at a level of 48.7. that is below the 50 divided line between contraction and expansion in the sector. that did match the december reading, but it was below the reuter's forecast of 49.1. so in markets hoping for a rebound in construction, not getting it. not too much of a reaction in markets. sterling up by about 0.2% against the dollar. now, let's take a look at european markets. check on some of these trading levels. we are generally speaking in the red this morning. the ftse down now by 0.25%. just a little lower for some of the other major indexes.

the ibex, cac, xetra dax and ftse 100. the bond walls, in terms of yields, they're all up across the board. interesting, too, we're seeing all of the equity markets close off with all the major bonds yields doing the same thing. forex, the yen in focus this morning. 93 there, up 0.4%. weaker again against the dollar, in fact, 2 1/2 year low owes that level. michael brown, is this a game changer for the yen? >> it's currency wars. >> to some extent, i guess the question is, there are plenty who are saying actually 2010 was a red herring. we are really in currency war mode now. are we in your view or does it matter?

>> if would matter if we moved significantly. i think at this particular point in time from a european perspective, and that after all is the currency that is in focus on the up side, then it's clearly not a huge issue. i think the vast majority of companies with big international trade are pushing fully hedged. it's rather odd that this should be happening at this moment in time. and clearly, should that continue to happen and if you like clip at the wings of the german exports, you would expect to see mormon tear stimulus down the line. there's an actual reaction. >> you almost hope the german weakens from that point of view. >> i keep thing about europe over and over and over again. people really don't realize it's an incredibly closed economy. we don't trade with the rest of the world as much as the united states trades with the rest of the world. it's not surprising the currency

stocks are sitting around on the influence of other things. because guess what? europe trades 95% of the time, 93% of the time with europe. >> again, a great point that we'll get into in just a second. i want to swing around ask talk about this story. spanish prime minister mariano rajoy is meeting with dpermny chancellor angela merkel. on saturday, the spanish prime minister came out and vehemently denied he and his party have received an illegal payment. sylvia, with all this political pressure growing on the prime minister at home, how does this change the discussion? >> it doesn't change discussions with angela merkel, but needless to say, everyone will probably be rolling their eyes just when we are at a stage in this eurozone debt crisis when the collective fingers of the panic

button for the market and the politicians, as well, after things are easing off after this statement from the ecb, etcetera, then we might be heading fast into a government crisis in spain of all maces. another country that is in trouble enough where things seem to be down a little bit. so that is a cloud over these discussions. but, obviously, there's nothing angela merkel can do about that. she just hopes quietly like everybody else that this crisis will boil over and they can return to the business at hand. these talks, of course, as you prepare the budget summit, but what we've heard out of paris already from the meeting with monte and hollande were don't expect in the results from this next budget summit.

the bottom line is, there's not a lot of news coming out of these talks we nowadays have ahead of summits. let's book it on the business as usual but not business as usual for mariano rajoy. >> i want to bring alberto into this conversation. michael brown is also still with us around the table. alberto, we just heard sylvia reference a potential government crisis in spain. how likely is that, in your view? >> good morning. i think there is some likelihood of rajoy losing consensus that has been put in on a decreasing consensus. but the key in spain is since the omd declaration in q4 last year, rajoy has been hiding spain's economic problems. so instead of really dealing with the banks and dealing with the regional deficit overhang, he just created a circle of loop

of help. so the government has been giving money to the regions, the banks to the regions and the government to the banks. but there's no real solution. the problems we main in spain. >> well, this is interesting. so, actually, michael brown was just talking about europe being somewhat of a closed economy. what you're talking about here in spain is this closed loop between the money that is getting in and borrowing. explain a little bit about this crazy looking chart here, flow chart, we should say, and this point that what happens in spain is staying in spain. >> this is a simplified chart of what has been going on. all the rectangular things are off balance. fade is the fund for utility financing. they're funded by the government. rajoy on the 31st of december increased the limit of these funds. frob and the bad bank are funding the banking system, the weak banks, including bankia.

and the ffpp is a fund where banks have lent 30 billion to the region. on top of this, there is the fla and the ico which is the state-owned banks which lend money to the region. and the iss is the pension fund for the social security which is now 90% invested in spanish debt. so just as -- >> social security and pension funds are 90% invested in their own debt. >> from 50% five years ago. >> that should be the case. i mean, don't forget, if you're holding domestic assetes and your sovereign goes back and change to a different currency, you as a pension fund will be paying out in that local currency. so it should be the case that you old that particular asset. indeed, one would argue a pension fund should continue to expand if that threat happens to -- >> it should be the case, but the problem is, a lot of the dry pods are available because the fund has moved from 50% to 90%. and spain doesn't have a primary surplus.

i mean, it has a primary deficit. so the problem is, if you don't save enough, if you're saving enough, you can be like japan. you can fund yourself. but if you don't save enough, you're using all the dry powder. you're using your banks and the social security fund to buy your own debt. this can only last for a certain amount of time. >> there is an interesting question, though, as to whether -- you mentioned this whole cycle and which this whole loop. some of what we've seen for european debt crisis is this vulcanzation to some extent. is it better or worse than spain's problems are less exposure or are sort of in this -- in this internal cycle as opposed to there being more exposure for investors outside the country. >> it's better for europe as a whole and in 2013, we are positive on the european market, on credit markets as a whole. we don't think the same domino effect is arising from, for example, economic, political issues in spain or political issues with alternative action.

but for spain itself, it puts the country in a loop. and recently, rajoy has been actually spending even -- wanting to spend more money. he wants to -- the people have lost private savings for the bankia in berlin, for example. i think we're looking at a denial situation which can last until there's market pressure. market pressure can arise from external events, as well. at that stage, you could see still a downgrade. we'll have the numbers in february. and you could see more political tensions in the region, as well. >> i just wonder, with this ecb bid in place, with whatever it takes the draghi approach, if we get bad news on that front, what is it going to take to dislodge? you say you're still exposed to spanish debt. >> at the end of the day, if it all goes completely wrong, something happens to rajoy or something happens to any of those elements that you mentioned, at the end of the day, you have to go to european

authorities and you have to go to the esm and ask the cat. that's what is backstopping the market because the markets have confidence now in that the actions of the troika could involve the imf, as well, will start to turn the spanish situation around. i.e., you have some certainty. i'm amazed sitting here now that spain has been able to get this far in terms of time without having to go record through a third party. >> i agree with you. the view on the market has to be positive. you have to be pro risk, especially on periphery. but, you know, spain is one of the exceptions, one of the few exceptions we see. but generally, this year we have more structural steps from policymaker toes fix the crisis, including the banking union which is only a few months ago. in june, the ecb will become the bank regulator for all the large banks and all of these are shifts from the liquidity measures we saw last year. generally, it's a positive 2013 for markets in my view. but the spanish situation itself

looks not very sustainable. so this is one of the open questions we have together with italian elections. the two biggest risks we've seen in the first half. >> it's all political. it sounds like politics driven 2013 as opposed to one that has much to do with fundamentals. as you rightly point out, you know, fisd may be deteriorating, but this -- >> there's a backstop. that's the point. the lesson of 2012, ignore the noise, ignore the politics, concentrate on the nitty-gritty stuff on day by day and the rest of it is okay. all the signals i get out for 2013 is exactly the same. have patience. this is noise. get down to the corporate level because it's much more interesting there. >> this all comes ahead of 2017, 2020. hopefully alberto will stay with us and come back at that point. thank you for joining us, head of macro and european credit research. just a couple more earnings bits to bring you, pepco has reported and the report shows a wide

operating loss of 275 billion yen of the current fiscal year. they expect this fiscal year another net loss of 120 billion yen. the nine-month group revenue came in, it looks like, above market -- or at least above the prior quarter. probably above the prior period, that is. the point, though, being that tepco expects a wider net loss for the current fiscal year. this compares with a -- i'm sorry, they expect a wider net loss of 120 billion for the current fiscal year. we'll leave it at that. down 1% as investors digest that news. staying in japan, the priority of japan's leadership remains ending its long running uptrend. nozomu kitadai has the details. >> hi, kelly.

japan's finance minister reported that he's still unsatisfied with the yen's recent levels. asso said the most important task for this cabinet is not overcome deflation and the yen's protracted and bring back a strong japanese economy. asso's remarks show the government's determination to lower the value further for japan's struggling exporters. that he hopes will lead to better profit margin or capital investment in waging those firms. since december's general election, the yen has fallen roughly 10% against the dollar. the yen keeps weakening. the market's focus is beginning to shift to the g-20 finance minister's meeting in moscow on february 15th and 16th. eyes will be watching to see if criticism about currency manipulation by japan's leadership will intensify at the gathering. back to you, kelly. >> now zummy kitadai. here is a look at what is on the

agenda for tomorrow. we'll be watching for trade figures for the month of december. in japan, we'll get key earnings out of toyota and mitts bu see and india releases its pmi numbers for january. japan airlines set net profits fall, but the carrier raised its forecasts by nearly %. jal said its plans to discuss groundings with boeing, and a u.s. probe over fires on the boeing dreamliner is reportedly set to meet with a french group. we've gone from looking at u.s. supply issues, maybe japanese

batterymakers now to this french company. wa can you tell us? >> we knew french companies were part of this dreamliner, the 787. it's a plane that contains the greatest parts of units made by a french company. in france, sellis is the manufacturer of the cables to the battery that's caught fire. the u.s. transport and safety board is going to send an investigation team to france to study this electrical cable made by thales. it's part of a wider investigation that has led to all 787 aircraft being grounded by the aviation authorities. meanwhile, in the same sector, the nomination committee this weekend shortly for the french representatives at eads, you know, that part of the new tractor, it will be 12 at the board. four of them will be for french representatives. according to the mission table,

the former chairman of the bnp paribas and the former president of sellis have been suggested by the elimination committee. and the former president of the ecb and also the choice will be made by the shareholders in march. >> another role there potentially for mr. jean-claude trichet. when we come back, foxconn workers are plan ago union vote in a historic first. we'll tell you what this means for the company and the chinese labor force when we come back.

welcome back. foxconn will be holding union votes at its plant in china. major concerns will chinese workers and concerns among major companies like apple. until now, unions have been

dominated by management. the rise of organized labor is one change affecting chinese industry. the shrinking workforce, yet another. as eunice eun tells us from this report, there are upcoming policies to deal with workforce issues in china nap. >> this is a rare view in china. a law professor, he and his wife were pressured to abort their second daughter because of the country's one-child policy. he refused and lost his job. >> there is no fairness with this policy, he says. it is cruel and inhumane. he is one of a growing number of voices pushing to reform china's notorious policy which limits his family to one child. the policy was put in place over three decades ago to help the economy develop while controlling social problems that could arise from unchecked population growth. but there is a cost to the control. china is aging much more rapidly

than other developing countries. last year, the workforce shrank for the first time by 3.5 million people, shocking officials. and the asian development bank thinks that over the next 20 years, the declining workforce will knock the growth rate of china's per capital ya gdp by 0.8% every year. even every day, this apparel company on the outskirts of beijing is struggling to find workers. now, despite raising wages by up to 30% per year, she can't find workers. and with the labor force waning, it will only get harder for china to stay in this industry that china is famous for. we are not competitive any more. i think in about 20 years, the china market salary is going to be so high that no mass

production manufacture would be possible here. >> authorities are hinting they might loosen the policy, though officials are weary. a population explosion could further strain the environment and resources of the already 1.3 billion people who live here. still swb some want to change the policy entirely abandon. after leaving his job, yung protested in the streets, calling for anyone to help him pay the nearly $40,000 fine to keep his second child. he raised the money, but still isn't sure about her future. sooner or later, everyone joins the labor force, he says. cooper will definitely generate more wealth when they consume, ensuring economic growth for future generations. cnbc, beijing. >> knew for more, let's bring in andrew lung of appeared rue lung international consultants. michael curry.

andrew, let's go to you, though, on this story. so foxconn potentially seeing its workers form unions. how likely is it in your view? what's the implication of this move? >> well, this is certainly a paradigm shift with a lot of implicati implications, sociopolitical and economic. for example, the chinese government, the leadership would not have allowed this kind of election if not for a deliberate decision. the change, how china's economy is going and to manage its shrinking labor force. now, on the economic side, we're seeing what economists call a curve trending point whereby the supply of cheap labor force is being exhausted as wages are rising and particularly a more educated labor force. so the margins for cheap labor production have shrunk so much

that it's no longer plausible and the country has got to be geared towards an upgraded kind of production system in order to stay viable. and, of course, the introduction explains that china's one-child policy and the impact on the labor force, but i think it's not just the quantity of the labor force, it's the quality. china has now become the top filer of patrons, according to the world incident ur national organization. so the china's manufacturing is changing all the time. >> michael, i just want you to make this point, which is to say that, as you said, this is already an issue, which if they change policy now, makes no difference. >> no. the cohort that's coming through now is going to be about 30%, 35% less than theco hort that is 45 and 50. that cohort is too old. it's not going to have any more

children. it's over, it's done. >> what are the practical implications, though? >> at the end of the day, it's all about that. a huge number of people are economically active who have their one child so they don't have a huge amount of costs. they're looking forward to their retirement. china does not have a huge system for looking after you in your environment. so they're going to say, first savings you see are going to go on and on. if anything, get bigger the. >> andrew, agree? >> yes, perfectly. it's not just economic, it's social and political, as well. with the labor forces becoming more and more educated, china is turning out something like 7 million university graduates. by 2030, china will have 200 million university graduates, bigger than the entire workforce than the united states. and so the kind of labor relations, the kind of workers

rights have got to change. the leadership is fully aware of this. that is why this has to happen. >> this is a great demographic debate. china now goes into a period of shrinkage and india is exactly the opposite place. and it is growing and at some stage if the numbers are correct, india will overtake china over the next 30 years by a demographic point of view. therein lie tess region why china at the moment is up to try and improve the activity, to try and maintain the competitive edge. obviously, we're going to see that swing happen over the next 30 years. however, i expect to be on the beach hopefully by that time. >> we're going to drag you off that beach to come in and let us know that it's happening. we should thank michael for coming by. thank you for your time this morning. what do washington, d.c. and the bermuda triangle have in common? stay here as we find out. we'll be joined by tina fortin

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welcome back to "worldwide exchange." i'm kelly evans. these are your headlines from around the world. the baltimore ravens are crowned super bowl champs in a game marked by pomp and circumstance, tragedy and a lengthy power outage. mariana rajoy faces calls in opposition to step down and

people take to the streets. and uk chancellor george as born is set to unveil plans that could see banks broken up. separating retail and is investment activities. we'll bring you live coverage of that highly anticipated speech. >> you're watching "worldwide exchange." bringing you business news from around the world. >> i don't know why i have so much trouble saying george osborne. i seem to twist that one up every time. in any case, we will have that speech coming up in just a bit. first, a quick look at futures. not much movement. the s&p is pointed down a couple of points. the nasdaq is sitting out the benchmark park. the dow jones industrial average was looking at that 14,000 level, now giving up about 5 points.

13,935 is the numbers there. european numbers are mostly in the red. the ibex numbers down about 0.5%. the ftse 1100 down about 0.3%. pretty quiet, otherwise, though. let's take a look next. the bond space, uk gilt over here, up 2.16% selling offer after weaker than expected data on construction. but not necessarily respond to go that so much as just generally the tone of markets overnight. the italian and spanish 10-year bonds looking at about 4.4% and 5.3% respectively here. it's interesting to see these arrows across the board. one of the main levels of today's session, weakening by about 0.4 had%. 2 1/2 year lows for the yen against the u.s. dollar, again, punching through that 93 level as it continues to march higher. quick check on commodities, too. we wanted to bring your attention to what's been

happening with gasoline, the strength here of the gas price off the back of what we've seen in oil threatens potentially to rob a lot of u.s. consumers of their spending power is perhaps one reason for caution about the macro picture there today. but giving up some of the recent gains that we've seen, down about 0.6%. still above $3 for that contract. copper, gold, all weaker overnight, too. still, just what's been happening in asian trade. let's bring li sixuan back in from singapore to update us on this. we just talked about the weakening of the yen. 93 to a 2 1/2 year low. what's that doing for the nikkei? >> the nikkei is still up for the fifth straight session to close higher by about 0.6%. that's to end at a 33-month high. the finance minister is overcoming the yen is still a priority. and panasonic shares, rallied about 17% today because on positive earnings, the company

was back in the black at q3. the shanghai composite ended higher by about 0.4% after official services pmi confirmed a mild recovery. coal miners soared on new demand. liquormakers took another beating after the public sectors were urged to stop hosting boozing banquets for the upcoming new year. pang an insurance slipped 3% today despite hsbc receiving approval to sell its stake in the insurer. elsewhere, losses from automakers and technologymakers sent south korea's kospi lower by 0.2%. meanwhile, australian shares ended weaker ahead of the rba's

position tomorrow. india's sensex closed down by about 0.25%. back to you, kelly. >> okay. sixuan, thank you very much for that. super bowl xlvii featured something for just about everyone, pageantry, beyonce bringing the house down with her halftime show and, oh, yeah, the football show, too. baltimore ravens won big over the san francisco 49ers when the lights went out in the new orleans superdome. you can see the reaction from people there on the field until you can't. it led to a 34-minute delay. extraordinary. officials say an abnormalities caused the power system to automatically shut down. when play resumed, the 49ers had a chance to take the lead late, but failed to score a fourth and goal. baltimore holds on winning, 34-31 for the second super bowl title in its team's history. we'll have more about the other part of the game. the super bowl ads, just who are the winners and losers in the next half hour. but first, sorry to do this, we

have to talk politics. president obama says more tax revenue will be needed to help reduce the deficit. he'll push to get rid of loopholes such as the carried interest tax break enjoyed by private equity firms and hedge funds. >> i don't think the issue right now is raising rates. the question is, if we're going to be serious about reducing our deficit, can we combine some smart spending cuts, because there's still waste in government, can we reform our health care programs in particular because we spend a lot more on health care than every other country does and we don't get better outcome. so there's a lot of waste in the system and there are things that we can do to reduce health care costs. >> asked about the contraction in fourth quarter gdp in the u.s., president obama blames the dysfunction in washington surrounding the fiscal cliff. a sharp drop in spending did over-shadow strong housing data. it followed unexpectedly strong defense spending in the fourth

quarter. maybe some positive news there. tina, from citi, she's been taking a look at what the president has to do, i guess, in his second term or what he's expected to do. what i loved was your point, how did you put it? fiscal deals or compromise tend to disappear in washington like -- >> the bermuda triangle. >> you don't have high hopes for compromise here? >> no. most politicians in the developed world, and the u.s. very much within this, it's not going to see -- i'm not going to provide fertile ground for grand bargains. politicians like to talk about it. this is their way of saying, we're ready to do a deal, but it's those guys, they won't compromise. we think we'll see more of this piecemeal last minute compromises. >> and we're fating critical issues in the u.s. people might be aware of the fiscal cliff, but there's the continuing resolution, there's the sequester that goes into effect march 1st. should we hold our breath for compromise here?

and, again, the issue is being forced because these are situations in which if there's no action, something still happens. >> that's right. that's why we think it's really important that house republicans made the move for a short-term compromise on the debt ceiling. that's good news for markets because it shows politicians are not going to play chicken with the one thing that could really make a difference to the u.s. economy. it does suggest, though, that both the sequester and the continuing resolution might be places where opposition republicans take the opportunity to try to extract some containment trt white house. >> and what's your -- as you've priced that in, what do you expect, actually, the to be the outcome as we head into march towards the end of the month? is there more fiscal drag related tr these talks? >> we still see economic up sides for the u.s. citi economists have improved their growth forecast overall, but this isn't helping and it's not necessarily helping business confidence. what we think markets may not be prepared for is the fact that ee

quest ragz is now likely to kick in. these are comments from both parties suggested that they be willing to allow this to happen. it may be the lesser of the evils. >> what are we talking about with sequestration? how much of a hit to the u.s. economy? >> well, again, the headline, sequestration may hit could be somewhat destabilizing. but the fact is, again, this might be a temporary measure, allowing sequestration, particularly to hit defense because, of course, federal health care programs are exempted, which is one reason why democrats are allowing it to happen. a few months of sequestration wouldn't allow a hit to the u.s. economy. >> is this the risk, too, that all of these things, as debilitating as they might be in the near term, as frustrating for those following them that they don't necessarily upset the apple cart so, therefore, nothing gets done about them. they become a series of crises. >> and you see that the street is increasingly tuning out washington's rhetoric. they're prepared for this

last-minute compromise, heart attack. >> which would be a sign of progress, frankly. >> it means the worst outcome doesn't happen. it means muddling through with a lot of on noise. >> muddling through, a lot of noise. it's not just the u.s. in that situation. we'll get to that in a second, though. more with tina to come up. first, the ravens may have won the super bowl, but budweis budweiser's sentiment ad took home the price prize. who do you think got the most bang for their buck? tweet us, @cnbcwex and i did ask michael brown earlier who did stay up here in london what his favorite ad was but, of course, he said broadcast cnbc, so they don't get to see the ads. can you imagine? >> no, even though i'm from san francisco. >> oh, look at that. >> right. >> still devastated by the

outcome, then, i would imagine. >> a little bit. >> my sister is in baltimore. she's pretty happy this morning i would imagine, maybe hurting a little bit, too. regulators are to be given the power so split up uk banks. this is one of the new laws to be outlined by the uk chancellor in a speech coming up shortly. again, we'll carry that speech live here on cnbc, 11:30 central european time, that's about 20 minutes time for those of you in the uk. and we will follow the entire speech plus the question and answer segment. so stay with us for that. meanwhile, there are more changes at the top over at barclay's tonight. chris lucas and general counsel mark harding both announced their retirement, saying it was the appropriate time. mr. lucas is one of four people being investigated over allegations the bank made loans

to qatar bought into the company at the height of the financial crisis. next week, george osborne will present his long awaited plans for transforming the banks. and a number of stories about rbs in the weekend press, too. the sunday times reports the bank will announce a 500 million pound settlement with u.s. and uk regulators this week. the ft says rbs will cover the fine from staff bonus tools after a warning from the government the taxpayer shouldn't foot the bill. the sunday telegraph says rbs is planning to float branch of of san tappeder it has so far failed to use. so lots going on, as we said, in financial services world today. and stick around, we're going to take a quick break. coming up next, we'll be live in berlin where the spanish prime minister meets chancellor angela merkel today amid a scandal that has prompted protests at home and is called for his

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welcome back to "worldwide exchange".. baltimore rarchbs were crowned super bowl champions in new

orleans. amid power outages. and uk finance minister osbourn is set to unveil plans that could see banks broken up. spanish prime minister mariano rajoy is meeting an la merkel today in berlin. rajoy's trip comes amid an escalating corruption scandal at home that has prompted calls for hiss ig nation. on saturday, the spanish prime minister came out and vehemently denied he and his party have received any illegal payments. silvia wadhwa is following this for us out of berlin. sylvia, how important are these talks today? >> of course, there are these clouds of the pestering scandal that could turn into fully pledged government prices. that's the last thing angela merkel needs, that's the last thing the eu or the eurozone needs right now. just when we get the signal of the panic button in the eurozone

debt crisis, we have another cloud on the horizon. but that's nothing angela merkel can influence. i'm sure it's going to be a topic of discussion saying, look, is this going to be a government crisis? can you avert this? that is nothing we will hear about. the official communique will sound similar to what we heard out of paris, out of the monte meeting. don't expect a result on this budget summit yet on the table and on we go to the next rendezvous in terms of the budgets. we've got another eu summit in march, which is not -- which is not ear marked, of course, as a budget meeting, but i daresay we will trickle along nicely or unnicely until finally they reach an agreement on the next budget. in terms of the eurozone debt crisis, of course, that's the other point of discussion. at the moment, there's a little bit of cautious shoulder padd g padding, but it will be a bit

more cautious because of the aforementioned festering crisis in spain. obviously, what we've seen at the moment is we live on the principal hope that the eurozone might grow itself or stabilize itself out of the crisis, a far cry yet for spain, but the latest refinancing operation in the various eurozone countries, including at the short end of the range for spain looks like a bit of relief. no relief in terms of the actual solving of the problems, but we'll hear none of that tonight. >> as we've learned, that's often the case with these situations. sylvia, thanks very much for that. tina fordham is still with us. from your point of view, how important is today's meeting? how important broadly speaking is this corruption scandal at home for rajoy and for investor necessary europe? >> i think this scandal is just a reminder that politics can intervene at any time. and it's unwelcome for today's meeting this berlin for rajoy and merkel.

they were protests over the weekend, a lot of media attention on the scandal. rajoy has announced an internal investigation. but what i think is really important is the fact that a trust in political parties in spain, all political parties was already weak. popularity was in decline. of course, we had the pro independence development. all of these are putting pressure on rajoy. this creates more noise, it reduces his room for maneuver. but what we need to remember is that this government has a majority in parliament. it's unlikely to collapse. and the next elections aren't due until november 2015. >> wow. and there's no prospect they be brought forward? >> in principal, you could imagine a situation where the prime minister could resign. but i am not inclined, based on what we know today, to see this scandal escalating to those proporti proportions. the important thing is that in an environment where trust and support are deteriorating, the public is likely to react. >> okay.

tina will stay with us. we're going to have a little bit more, actually, on what's happening in europe and some politics in italy in particular to focus pop we'll ask if sylvia berlusconi has a chance for a comeback in italy because it appears increasely that he does. , impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing.

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here is what's on the agenda today in the u.s. reports on the trade deficit, consumer credit and productivity are due. today, we'll get december factory orders at 10:00 a.m. eastern. the stream of earnings will start to slow. we hear from clorox, gannett, humana, simon properties, anadarko, hartford financial, yum brands. u.s. futures, we can take a look at how they're positioned. slight declines, i believe, or the morning. yep, about 15 points off the dow. a couple off the s&p and nasdaq. but it's those levels we're watching as much as anything and the dow jones has ridden a relatively smooth path to 14,000, but can the rally continue? there's plenty of debate and analysis at cnbc.com. check that one out. thou, sylvia berlusconi has called it, quote, his last

political rally. the prime minister promised to abolish an unpopular property tax and refund the payments in cash. mr. berlusconi promised not to increase the at or impose a wealth on high earners. italian magistrate these week will questionmo mont depaschi' executives. on saturday, a rome court ruled the plan by italy's central bank to use bonds to bail out monte paschi can go ahead. tina is still with us. you've said it it's italy that is the most important thing to watch as we continue to assess whether europe's rolling debt crisis is truly behind pus. >> that's right. not ohm is italy a major economy in the eurozone having elections this year, but there are a lot of moving pieces in this

election. >> and berlusconi, it's a bird, a plane, a superman? it's teflon. >> he has the remarkable ability to re inveinvent himself and he colorful character. however, looking at the data, it is highly unlikely that he'll be able to win a majority. >> what does that mean? what are the prospects, first of all, of him coming back to power in any capacity and, secondly, from a government that needs a mandate? >> two different points. when we look at the totally of the preelection data, you see a very mixed bag. you have a new party list from mario monti hovering between 10% and 15%. then we have a new political party. we've talked a lot about what we call meats in the eurozone parties led by grillo. that's getting around 50%. this is fragmenting the vote. now, again, beryl skonny's party is gaining some steam with these remarks. don't forget, he also brought

mario ballotelli to ac milan. will it be enough? it does come down to electoral dynamics. it's still likely in our base case scenario that you get a central left coalition, but the risk is that as beryl skonny's support picks up, that you could have a hung parliament. >> leaving it quite vulnerable and renewed market pressure. you have to do like balando lik find a way to net one. coming up, george osborne is expected to warn banks to shake up risks or face a break-up. we'll stay with the full speech coming up straight after the break.

welcome back to "worldwide exchange." the baltimore ravens win the super bowl amid major power outages. and uk chancellor george osborne

is set to unveil plans that could see bank broken up. we'll bring you live coverage of that highly anticipated speech. well, the dow has closed above 14,000 for the first time since 2007, but we're looking at a decline of about 15 points for that index when we open later this morning. 3,927 is the level to watch. the nasdaq and the s&p 500 also poised to open lower. quick look at what's been happening overnight, the cnbc ftse global 300 is down. we're down about 0.2%. the nikkei, an outperformer as the japanese yen 2.5% below the dollar. now also 0.9% off the ibex. we have seen a weakening here in

just the last half an hour or so. how do you make money in these markets? here is what some of our guests have been telling us all morning. >> the safe haven trade that the sterling had been participating in is now fading with stability in europe. we'll continue to see that flow from the uk into europe and we'll continue to see a higher euro/sterling. >> to the middle of this year, i think equity markets will be higher. are we going up in a straight line? no. we've had a very strong rally in skrarn. i think there's a real risk that we could see some consolidation, some minor setbacks. and i just worry whether markets are ignoring the risk factor. >> when the euro equity markets go up, the euro goes up at the same time. that does not make fundamental sense because that stronger euro

is a de facto tightening of monetary policy. that's going to squeeze economics growth. that is the thing that's fundamentally going to take these markets back down. >> and the uk chancellor george as born is due to speak about the future of banking. he's expected to outline plans to give british regulator tess power to break up banks, splitting retail and investment activities. he's due to step up to the podium any second now. we'll bring you live coverage of that the moment it happens. the super bowl, yes, it's about more than just the game on the field. it's also where advertiseders can capture millions of eyeballs in hopes of turning them on to the latest and greatest products. companies she would out an average $3.8 million for a 30-second ad for this year's game. yesterday's super bowl ad meter let viewers rate commercials. this year's winner?

budweiser's super bowl baby clued daily@. ad. ♪ ♪ and if you see any reflection ♪ ♪ >> snow covered hills. where the land slide bring you down ♪ >> i think i'm going to need a moment. charles taylor is marketing professor at villanova school of business. charles, good morning. thank you so much for joining us. what did you think about the clydesdale ad? >> good morning. >> good morning. it looks like they went for the emotional route. sometimes we see these humerus ads come out. this one, a little more of a pull on the heart strings. >> i think it's a great ad.

and they drew on the tradition of the brand, but more importantly, it's an emotional ad and a lot of -- a lot of viewers on twitter reported getting choked up because of the relationship between the trainer and the foal. budweiser is also doing a neat thing that they're having a contest to name the foal who was born january 15th, i believe. and it looks like the foal's name is going to be buddy. so, really, a wonderful ad, in my opinion. a comeback for budweiser, which has had a couple of tough super bowls. >> and we are just raising the question, who gets the most bang for the buck out of these ads? is it just a talking point for a can happen couple of days? or are there companies who you think get a real long-term benefit from this publicity? >> i've actually been doing some research on this with a german professor from munich school of management where we're looking at the impact of super bowl ads on firms and you really have to

look at first the buzz, which you would say today's ad meter does a good job of measurering that. but the buzz only lasts about one day. it's super bowl ads appear to give a bump on the brand level we've been analyzing yougov's index. we're finding that brands that run good ads can get a significant bump that lasts a full month, which is really very significant in terms of advertising. and i actually think we're going to see several brands. i think you hit on a big theme of this year's super bowl which more feel-good stories as opposed to try to not necessarily so true gimmicks any more. seem to be effective this year. >> and to take sort of the contrasting examples, an ad that apparently got a lot of buzz but not necessarily positive buzz, godaddy's buzz. do you think this back fires for them, or is any publicity good

publicity? >> i don't see how that ad can we viewed as a positive. a lot of the social media on it where people were saying they were, you know, to use a vernacular, grossed out. i will say godaddy's other ad that focused on -- was a departure for them and was pretty effective in educating people. but bar rafeli ad i think was -- it's kind of hard to mess up an ad that she's in, but they seem to do it. >> i'm sort of cringing there as i see it. over here, the game was so so late, i didn't catch it myself. and if you watch it on the bbc, you don't see these advertisements. even though a lot of people around the world watched the event, it seems to be a very u.s.-driven market. >> yeah. there's no question, the super bowl is -- ads are very based in

u.s. popular culture. we really haven't reached the point where a lot of these ads are based on global campaigns. there's a rare exception. coke had an ad in the first half where the idea for the creative came from latin america. and it was a pretty decent ad. but we don't see too much of that. the super bowl is an american pop culture event. we'll see, that could change over time, but it's not the case now. >> quickly, charles, with the power outage, how did that affect the advertisement? did people get to run ads repeatedly? how did they handle that event from a marketing point of view? >> this is going to be much talked about. cbs did not run ads during the power outage. they waited until the game came back on. i think the only thing that is saving cbs from a major controversy over this is the fact that it was a close game and san francisco made a comeback and almost won. i still -- if i were an

advertiser post blackout, i don't -- i wouldn't be entirely happy about it, but given that the game was close, i don't think it was a disaster by any means and i don't think that this will be something we'll hear about for a long time. >> well, and i would never -- >> although -- >> go ahead. >> oh, i will say that i was a little disappointed with coca-cola's ad where they had people choose the ending of the ad online. i think, really, it was something that was very clever and worked well in social media, but tending of the ad was just shown in a brief commercial that appeared right after the end of the game. and i do think that in that case, a 35-minute delay was something that didn't help. i mean, people were kind of anticipating that ad, but it's unfortunate that it ran over. >> especially the end result wasn't quite what people were

hoping for. charles taylor, thank you so much for your time on that this morning. as you said, something to see how people reacted to cbs's handling of that power outage event. we've been asking who you thought got the most bang for their buck out of the super bowl advertisement dollars spent $3.8 million. e-mail us, tweet us. we'll be right back. ow prices,

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welcome back to "worldwide exchange." the uk collapse lore george osborne is due to speak about the future of banking any second now. he's expected to outline plan toes give british regulator tess power to break up banks, splitting retail and is investment activities and is he's due to step up to the podium shortly with that speech. we'll bring you live coverage as it happens. there's apparently going to be a question and is answer period so it could be very revealing and an important gauge broadly of where powers are headed. if you're just joining us on the program today, these are your headlines. baltimore ravens are crowned super bowl champions in new orleans. shape's prime minister rajoy facing widespread programs and calls to step down as scandal escalates at home. and uk prime minister osbourn could see big banks broken up.

a little bit of news out of commerce bank, which is reporting a net loss of approximately $720 million euros in the fourth quarter of 2012. this extraordinary depreciation on deferred tax accruals and the amount of 655 million euros in the fourth quarter. the company's statement, these are preliminary unaudited figures suggesting, again, quite a wide loss for the fourth quarter period resulting in 185 million euros of charges from a certain sale and depreciation on tax accruals, deferred tax accrualaces on half or more than half a billion euros. keep an eye on shares for reaction. look at that popping up about a quarter of 1% now. here is a quick look at today's other top stories. there's been lots of earnings.

boeing's 737 jet may have other issues. companies blame outsourcing as poor parts operating outside of boeing's control. one engineer said unlike other boeing jets, the power distribution jets are like radio shack with parts that are cheap and broken to failure. boeing denies its supply of 787 suppliers was insufficient. a pair u.s. pension funds are suing plaquerock alleging blackrock and etf intended to take a percentage of investments for themselves as disproportionate. blackrock shares apparently responding in suit, up 1.75% and

doing quite well over a three-month period up almost 20%. the long shoreman's union and workers have agreed to a deal. a walkout would have halted cargo shipments making the first work stoppage in 35 years. and the u.s. government and mexican growers have reached a tentative deal to avert a possible trade war. the tradeoff stems from a decision last year by the u.s. to withdraw a bylat rack packet over tomatoes. and from blackrock to blackstone, blackstone has received a underwritings license expanded to investment banking. the financial times says blackstone will use the license for now to serve clients on corporate structuring and workers. it doesn't rely on a team of salesmen and analysts. shares up about 1% on the news, also doing quite well over the

last quarter. now twitter says hackers attacked its site last week and may have gained access to passwords and other information for from as many as 250,000 users. the attacks were sophisticated and involving the "new york times" and "wall street journal." twitter says the has ae set passwords as a precautionary measure. others were told to change their passwords just as a precaution. we know a little bit about twitter here on "worldwide exchange." in fact, we love getting your tweets, so keep them coming. hopefully you weren't affected by the incidents. let's get a check off european markets, though, and see what's happening today. we're seeing for the most part red arrows. now, the ibex, look at that. just crossing a 1% decline for the day. the ftse 100, down 0.5%. as well as the xetra dax and the cac 40. these indices had their best

january on record. that was also the case in the u.s. here is a look at what's on the agenda today in the u.s. it's a lighter week for economic data after that heavy week the last time around brought the jobs report and gdp. this week, though, it will be the trade deficit and consumer credit in focus. also, productivity. today we'll get december factory orders at 10:00 p.m. eastern. the stream of earnings slows a business, but well here from color yox, g annett, humana, simon properties, anadarko, hartford financial and yum brands. i mentioned some of the benchmark levels. we're giving up gains a little bit on the dow, pointed lower at the open if things stand where they are currently. the nasdaq and s&p declining, but 1504 on the s&p 500. so still trying to hang on to those key levels. can they stay up there? we'll talk strategy when we come back.

the uk chance lore george osborne is due to speak about the future of banking and giving british regulators the power to split up banks. he is due to step up to the podium any second now. we'll carry this speech live as it happens. question and answer period is expected. we'll have more coverage here for the viewers in the uk and across europe as that develops. meantime, let's get michael gurka's take on markets. michael, it was great to see you here in london last week. you're back in the u.s., back in chicago. what do you think about holding on to some of these key market levels where we closed friday? >> well, you know what, kelly?

it's all about the upside. we're seeing it in the s&p. targets are still break away towards that 1562 level, so any pullbacks, i think, will be met with more buying. but the run away euro here above 135 and, of course wrb crude oil does take a bearing here at 100 in the wti. the last breakout we're looking for is gold at 1684 and we're only about 20 u.s. away tr that. but, again, it's all about the upside here. and i'm not surprised you're going to see small profit taking in at least the middle or or beginning of this week. >> sure. longer term, explain to me ohio gold does well when risk assets are doing well. >> it should not. and i think i understand just where that's going. for those reasons, i think it gets sluggish at these levels. a lot of it might be attributed to just the weakness in the dollar right now. it seems as though there's a coordinated effort to watch the dollar continue to lose value and along global equity markets i think you're seeing the premise that maybe that helps the exporting nature of the currency. >> how is the dollar trading at this point, michael? is it generally benefiting as a

risk on trade? because we saw a little bit of that happening in january where on those days of stronger data, stronger markets, it will be a stronger dollar, too. do you expect that pattern to hold? >> i think i do for the near term. there's some forecast up at 1.38. they're realistic at this point. the problem is will it become problematic for some of the foreign markets to watch this occurrence happen? you know, eventually what's going to happen is this is going to start trickling into some of the fundamental releases we see. on the economic front, i think that would be hitting around march. that's where we want to take a queue, at least to see how that works on. >> because you were talking about the euro there which we've seen on this, the teflon euro tear you might call it. i was wondering generally speaking what the trading pattern is for the dollar. how do you trade the dollar at this point? >> well, the dollar index has absolutely had a stealth bid to start last year, and is all of a

sudden we saw all that erosion. so right now that's probably a great way to trade the basket because you've seen such a different way the yen, the euro and the british pound have trade against the dollar. i think a lot of the emphasis here in chicago, or at least on the u.s. front, has been watching the dollar index at some of these levels. but, again, attributed to the euro has probably been the most forefront way of looking at that because, technically, it's been an absolute bullish indicator going forward. ask, again, right now i think it looks steady at that nature. >> and right now, we're showing here at dollar/yen. 2 1/2 year lows for the yen against the dollar. can it continue here in this current range? again, sitting in chicago, how important has this new trading pattern been, this weaker yen supporting sentiment across japan, but how is it affecting markets more broadly? >> i think more broadly what you're looking for is probably the entire interest rate environment kind of coordinating

those levels. it seems as though japan, at least from a fundamental standpoint, is starting to implement some of these procedures from a monetary standpoint. and that's showing up in the currency cross. that being said, from a broad measure here in chicago, you're really not seeing any emphasis coming into the markets that way. you know what? we're watching more ten-year yields, how the dollar, you know, reacts off some of those levels. and like i said, the emblemation of where the crude markets are believing the dollar is going to look. i'm a little surprised at least that you're seeing the bullish nature on the crude. >> what do you think about the ten year's reaction to the jobs report friday? it seems as though a report where the payroll was affected might see some sell-off in that contract. we saw the rally in the ten year, back below 2%. what is going on and do you expect that to continue? >> i'm not surprised. i don't think there's enough fundamentally to see that. it goes ten years out.

it's a three-month contract. what you're looking at right now, some of the premise that we might see higher rates down the curve or down the road, but nothing that's definitively coming into the market yet. that's why i'm not surprised at that rejection in the ten-year. rather than that euphoric that takes it out to the technical levels. and as long as we're above it, i would see us ease back in yields or see the rally in the ten-year future at least continue tr these areas. >> let's go back to oil. it's almost the other side of the coin here if you're continuing to see this risk rally you're talking about, we're going to see oil headed potentially for triple digit levels again. we've seen gasoline prices at the pump in january, at their highest level in january ever for the start to the month. that's going to potentially be a problem here for the u.s. consumer. is it not? >> it is. and that's the quandary because you're not seeing the fundamental demand from the product, you know, as underlying the contract that shows why it's at these elevated levels.

right now, at least, some of the emphasis like we just said in the ten year, some of these resistance level is being sold off in the crude market. that we haven't is a little bit surprising. again, i think as you start siegel excavated prices, the consumer is going to show that. i think demand starts to lower itself. that's why we're implementing, at least looking at some of these markets right now. believing at least that you start seeing more of a necessary level target around 92, 93 in the wti. >> michael gurka, bright eyed this morning. michael, did you not stay up late watching the super bowl? >> i couldn't miss that. seriously, how do you not throw into the end zone on second and third down? shame on you, jim harbaugh. what are you thinking? >> i wish i could pretend to know what you're talking about. maybe i'll watch it tonight. michael gurka, thank you so much. uk viewers stay with us. george osborne will speak right when we get back from the break. for u.s. and european viewers,

it's a good-bye for now. following this one, you don't want to miss what the chancellor had to say about breaking up big banks. thank you for joining us here on "worldwide exchange." if you can, stay with us. great, everybody made it. we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location.